Angry campaigners are demanding a new ‘Duke of Westminster Tax’ to stop mega-rich aristocrats passing on their estates to their heirs almost entirely tax-free.

The Lib Dems said they want a tough new anti-tax avoidance law to end the scandal of billionaires passing on huge wealth without the nation's coffers receiving a penny in tax .

It comes after 25-year-old Hugh Grosvenor, the new Duke of Westminster , inherited a £9billion estate following the sudden death of his father last week.

He will avoid paying billions of pounds in inheritance tax as the majority of the estate is kept in a series of trusts, which are virtually tax exempt.

If HM Revenue and Customs had collected the standard 40% death duty, it would have amounted to nearly £4billion for the public purse.

Instead, the only tax the Grosvenors will pay is a charge that comes around every 10 years, and amounts to just 6% of the trust holdings. There is no suggestion they have broken any rules.

Lib Dem leader Tim Farron told the Mirror: “Hospitals are having to cancel important operations, while not enough money is being pumped into schools to help kids from poorer backgrounds get on in life.

“At a time when our public finances are being starved of funds, it cannot be right that one individual receives £9billion through complicated yet entirely legal trust funds.”

Read More

It comprises the Grosvenor property business with £11.8billion in assets; Wheatsheaf, which invests in food, farming, energy and water security; and the Family Investment Office, which manages Downton-style estates across the country.

The late Duke, who had four children, once said: “Given the choice, I would rather not have been born wealthy but I never think of giving it up. I can’t sell. It doesn’t belong to me.”